CONDITIONS OF THE NEW AGRICULTURAL ECONOMICS

The industrial agriculture model is more and more criticized, most of all because of its external effects. Also its motive forces run out. This model is replaced with a sustainable agriculture model, which takes account of the limitations of natural resources, external costs and public good as well as social and economic objectives. Development of agriculture according to the sustainable agriculture model requires that the market mechanism be supplemented with the institutional (political) mechanism. This mechanism is developed within the common agricultural policy of the European Union. The model of sustainable agriculture corresponds to the new agricultural economics - a changed economic account covering, in addition to market 'items', other elements related to external costs and public goods created by agriculture. The globalisation process shifts the problems of agriculture to the global level, giving them a new dynamics and strongly influencing agriculture in individual countries. External forces more and more determine the functioning of agriculture, whereas the role of the institutional (political) factor is diminished, since globalisation in the political field lags behind the globalisation in the economy. This changes the development conditions of agriculture to the disadvantage of the sustainable agriculture model.